CBO: Medicare spending growth will slow down over the next 25 years, despite pressures from aging population

Medicare and Medicaid spending will grow at a slower rate than past predictions indicated, the Congressional Budget Office stated Tuesday. However, an aging population will put increasing pressure on government healthcare programs.

Federal spending on Social Security and the major healthcare programs is set to “rise sharply” and account for 14% of gross domestic product by 2039, according to the CBO's annual budget outlook. Yet, the CBO projects Medicare and Medicaid spending over this time period will be $250 billion less than the agency projected in 2010.

The slowdown in spending might be linked to Affordable Care Act policies, Los Angeles Times reporter Lisa Mascaro noted. However, the CBO outlook does not state this explicitly.

The report states, “actual spending on healthcare has been lower than CBO had anticipated, and analysis by CBO and others suggests such spending will grow more slowly in the future.”

While it stands to reason that Medicare — which is for people over age 65 — would see rising costs linked to an aging population, a significant proportion of Medicaid dollars also goes toward seniors' healthcare, particularly long-term care. About 30% of federal Medicaid spending was for long-term services and supports in fiscal year 2013, the report notes.